For many people who require long-term care, Medicaid is the only option for financing. Medicaid is a federally subsidized, state-run program providing health insurance to those who meet financial requirements, especially children, seniors, and the disabled. In some states, like New Hampshire, Medicaid is simply called Medicaid. In Maine it is known as MaineCare. In Massachusetts it is MassHealth.

For our purposes, we will be talking specifically about how Medicaid services seniors in need of long-term care. In order to qualify for this assistance, there are strict eligibility requirements, both medical and financial.

Medical Eligibility

To qualify for Medicaid coverage for Long Term Care, medical need has to be established. This is determined by assessing the need for assistance with Activities of Daily Living, medication management, or the degree to which cognitive impairment threatens safety.

In Maine, the assessment process is conducted by the state Department of Health and Human Services (DHHS), which uses the KEPRO Assessment, formerly known as a GOOLD Assessment, to determine medical eligibility. In New Hampshire, the evaluation process is not an independent assessment, but rather a review of the senior’s documented medical history by a team of DHHS professionals. The review team carefully assesses physician’s notes and recommendations, and, in some cases, asks for additional examinations and testing. If you live in New Hampshire and you believe your loved one will need to apply for Medicaid, talk with your loved one’s physician openly and honestly about the challenges you have observed that he may not be aware of, as his support will be critical.

In both Maine and New Hampshire, you have the right to appeal the decision if the assessment shows that your loved on is not medically eligible for Medicaid assistance.

Financial Eligibility

Financial eligibility requirements vary from state to state. All states have asset limits that are generally very stringent. Middle class people are particularly vulnerable in this regard. In general, people in the middle class do not have the assets to pay for nursing care privately if it becomes necessary, but they have to go through a significant “spend down” of their assets before they qualify for Medicaid assistance. In the case of a couple, there is some protection of assets for the “community spouse,” meaning the spouse that remains living independently in their family home. Still, the provisions are not much and the spend down can be financially devastating.

In addition, some states also have income limits that can disqualify seniors from receiving Medicaid benefits. These kinds of limitations vary from state to state. To get a clearer idea of what the requirements in your state are, or whether you will have trouble qualifying for assistance, speak to an Elder Law Attorney, or contact a local Senior CareAdvisor.

Non-Countable Assets

There are some assets that are considered non-countable or exempt in a Medicaid Financial application. These include the primary residence, household furnishings, wedding rings, vehicles, pre-paid funeral expenses, and businesses that still produce income. This is not a complete list, and again, this can vary from state to state. It is advisable to speak with an Elder Law Attorney about what is and is not a countable asset.

Look-back Periods and Penalties

When applying for Medicaid, a person’s finances may be subject to a “look-back” period. The length of this period varies from state to state. The purpose of this period is to prevent people from giving away money to children in order to shelter it from Medicaid. If any substantial amount of money is found to have been given away during the five years prior to the application, or any countable asset sold for significantly less than its market value, there is a penalty period.

The penalty divides the amount of money given away, by a state-set nursing home monthly cost; the senior then becomes ineligible for Medicaid assistance for that number of months. For instance, if a senior gives their son or daughter $40,000 dollars within the look back period, and their state-determined nursing care rate is $5,000 per month, that senior becomes ineligible for Medicaid assistance for a period of eight months. This has become a widespread problem, as so many people engage in the practice of giving away money before death to avoid estate tax.

Under certain circumstances, some asset transfers are considered protected. Be sure to check with a qualified Elder Law Attorney before making a significant transfer of assets.

Elder Law Attorneys & Medicaid Planning

Elder Law Attorneys are experts on the Medicaid requirements of the states they practice in, and they are the most qualified to assist in financial planning in terms of qualifying for Medicaid, whether it be in a crisis situation, during a spend down, or well in advance of needed services. See the Elder Law Attorney section for more details.

The first thing to understand about Medicare is that it does not pay for Long Term Care services, including Home Care, Assisted Living, Memory Care, or Nursing Care. This is a common misconception about Medicare, leading many people to believe they do not need a contingency plan in place once they qualify for Medicare.

Medicaid is the federally and state funded program that helps to pay for long-term care under certain qualifications. However, not everyone who qualifies for Medicare also qualifies for Medicaid. Medicaid is only available to people who fall beneath strict asset and income limits and access specific medical care. These limits vary state to state, as does coverage. You can read more about this program in the Medicaid section.

Medicare is a federally funded health insurance program available to all people over the age of 65. It is also available to individuals younger than 65 with permanent kidney failure in need of dialysis treatment, or to individuals who are unable to work due to disability and meet specific criteria. It operates similarly to traditional health insurance, but there are no limits on pre-existing conditions.

Medicare is broken down into many parts:

Part A provides inpatient hospital coverage, rehabilitation stays at Nursing Care Communities, and Hospice Care. There is no premium for individuals over age 65 who are receiving Social Security. If you are not eligible to receive social security, you may have to pay a premium.

Part B covers outpatient care, primary care, and specialist care, as well as some additional services; e.g., mobility assistive equipment. Part B costs an affordable, subsidized premium, which commonly is deducted from your Social Security pension.

Part C is called Medicare Advantage and is an optional substitution plan to Parts A and B. Medicare Advantage plans are run by private companies, but they are overseen and regulated by the government. They must include all of the benefits of A and B, but often include extra coverage for a higher premium; this may include prescription, vision and dental care. Out of pocket expenses may be lower with Part C plans.

Part D is prescription drug coverage. Like parts A and B, the government manages it, but it is voluntary to enroll.

You want to enroll in Medicare during the three months before you turn age 65 in order to ensure there is no delay in your coverage. If you miss this window, you may still enroll up to three months after you turn age 65, not including your birth month. In other words, if you turn age 65 in April, you may enroll, penalty-free, from January until July. If you do not enroll during this period you may have to pay a higher premium for late enrollment.

Medicare also has a yearly open enrollment period that falls between mid-October and early December, though the exact dates change by year. During this time, you can make changes to your Medicare coverage. It is important to understand that Medicare is not one-size-fits all, and as you age and your medical needs change, you may need to change your coverage.

Often, people are either under insured or over insured. To determine if you fall into one of these categories, get some assistance in evaluating your needs. Medicare.gov has a plan finder that can help you find what kinds of coverage are right for you, given your medical and prescription needs. Additionally, you can contact your local SHIP (State Health Insurance Assistance Program) for a referral to someone who is qualified to support you in figuring out what coverage plan is right for you.

If you have questions about Medicare, please contact us. We will happy to answer your question by e-mail, or set up an office hour to sit down with you and discuss your questions.